Prices will fall to around $127 a metric ton for the three
months starting Oct. 1, from the previous quarter, Sam Walsh,
the head of the London-based company’s iron ore business, said
today. Rates almost doubled in the April quarter, and gained
more than 20 percent in the June-to-September period.

“We are going to see ups and downs along the way and some
of that clearly relates to economic circumstances and some
relates to supply coming on,” Walsh told reporters at Rio’s
Brockman mine in the Pilbara region of Western Australia.

Rio rose 1.5 percent to A$73.29 on the Australian stock
exchange at 3:18 p.m. Sydney time.

The company today opened its $1.5 billion Brockman 4 mine.
The mine will reach an annual production rate of 22 million
metric tons in the second half of 2011, Michael Gollschewski,
Brockman’s general manager, said today.

Expansion Plans

An expansion to 40 million tons will be considered by the
board for investment approval in November and could start
production by 2013, Gollschewski said. The company is boosting
overall iron ore output to 330 million tons from 220 million
tons from its 12 mines in the Pilbara.

Rio is still seeking approval from countries including
China for its plan to combine its Australian iron ore operations
with BHP, the world’s third-biggest exporter, Walsh said.

“We have been responding to a large array of questions”
from regulators around the world, Walsh said. “This is not
something we will give up on at the first challenge.”